The Great Rotation Is Here: Small-Cap Stocks Have Surged 18% in 2026 While the S&P 500 Sits Flat, and the Divergence Has Not Been This Wide Since 2003
The Russell 2000 has returned 18% year-to-date while the S&P 500 has gained just 6% and the Nasdaq 4%. The valuation gap, floating-rate debt advantage, and domestic revenue exposure are driving the widest small-cap outperformance since 2003.